Keras Resources PLC (LON:KRS) Managing Director Dave Reeves caught up with DirectorsTalk to discuss the move to Wycheproof, highlights from their latest production update and thoughts on gold price and how this will benefit the company
Q1: Now Dave, you’ve mentioned to us that you’re getting a number of emails from shareholders regarding the move to Wycheproof, so if we can address those first. I think the two main questions being have Keras Resources stopped mining and how long is the delay for?
A1: Yes, sure Giles. There was just I’m getting a lot of emails and everything, people are a bit concerned that this means a break in production and mining’s a cyclical business, you need to do your grade control, drill and blast and then mine so cycles in a pit and depending how constrained the pit is you always have times, in more constrained pits, where you’re not physically moving dirt a part for the process and that’s what’s happening at Wycheproof as we speak. I’ve been out there today and I think it was 13 degrees, raining and low cloud (I’ll post a few pics of that tomorrow when I get in front of my computer), and the grade controls’ almost complete, that’s the first part of it, the drill blast rigs and we’re moving all the equipment up there, we’ve set up camp at Wycheproof and so it’s just part of the mining process. So there’s no real delay per se and we’re cracking on with that high grade 3 gram ore body very shortly.
Q2: So you did put out a production update today, can you talk us through the highlights?
A2: Yes sure so we’ve just talked about moving to Wycheproof, we’ve had 3 months of experience now and Anomaly and Accord just to refresh everyone 1.5 grams Wycheproof plus 3 grams so we’re moving into the really juicy stuff at a very good time when you consider the gold price. At the same time it probably has a lot more detail on the permitting required for the undergrounds because we did get a few emails on that post interim results where there was some confusion over start dates and just wanted to put out a little bit about the process. We’ve done all of these permits for Anomaly and Accord, those two pits and for Wycheproof so we can be in there now so it’s a standard format, we’ve got to do a little more on the safety for the underground but all going well and we should be in a position to commence initial works late this quarter.
Q3: Now you touched on gold prices a minute ago but UBS forecast gold prices to rise to $1,500 (US) by 2020, what are your thoughts on this and how will this benefit Keras Resources?
A3: I had a very interesting chat with a guy in Kalgoorlie last night and it’s a fascinating time to be in gold, I think it’s a fantastic time, obviously there’s a lot of turmoil everything from Brexit through to concern over various countries’ debts and where the world’s heading and you’re only just starting to see the asset managers heading back into gold as a safe haven. So I think personally we’ve got a long way to go in gold, also if you have a look at supply and demand, ever increasing demand in this turbulent world and supply, if you have a look, there’s not those big monster deposits being found so often these days, lots of smaller shows but there’s no iron ore tidal wave about to hit the market or anything like that. So if you look at the supply and demand side, it’s a great commodity as well, there’s going to be no flooding of the market in the short, medium or long term unless there’s some other big discoveries are made and nothing’s being made for a long time, certainly in Australia, that replaces the amount of gold that’s being mined at the moment. Add all that together, turbulent world, no easy supply-fired reaction and yes, I just think gold’s a wonderful place to be for the medium term.
